Broad Market Analysis – May 11, 2018

Hi team. This is A.J. Brown with Trading Trainer on the afternoon of Sunday, May 13, with your Trading Trainer weekend edition of your daily insights. What we’re going to do here is take a look at the broad market, by taking a look at the representative indexes of our watch list, namely the Dow Jones Industrial Average, the NASDAQ Composite Index, and the S&P 500 Index. We’re also going to take a look at the New York Stock Exchange Composite Index and the VIX Volatility Index. And, because it is the weekend, we’re going to take a look at both daily and weekly charts. But before looking at any charts team, we’re actually going to log into the Trading Trainer ‘Learning Community’ web portal, by going to login.tradingtrainer.com. And, of course, once we’ve logged into the ‘Learning Community’ web portal, I’m going to direct you right to today’s ‘Daily Insights’ tab and further to the ‘Recommendations’ sub-tab.

Team, take a look at the recommendations we have for tomorrow, which is Monday, May 14’s trading session. Slight changes in these recommendations could have a major impact on your trading. You’re also going to find here a link to our audio commentary. That’s the audio where I take you by the hand through today’s daily insights and its sub-tabs. Go ahead and click on that link. An audio is going to start playing automagically in the background in another browser tab or another browser window, depending on how you have your browser configured. Go ahead and listen to that audio the first time you do click through today’s daily insights and its sub-tabs. It will make sure you hit all the high points. You can always drill down deeper on your own after the audio is over. Team, when you listen to the audio commentary, please pay special attention to the opening and closing comments. In the meantime for this particular broad market analysis, of this chart of interest video series, let’s click on the ‘Daily Insights’ tab and the ‘Index Stats’ sub-tab

Moving on to our secondary indexes, our 100 best stocks out there shown by the S&P 100 gained 0.25% this past Friday and gained 2.6% this past week. Our mid-caps shown by the S&P 400 Index, edged up 0.06% this past Friday and gained 2.19% this past week. Our small caps shown by the S&P 600 and the Russell 2000, two different perspectives on small caps, gained 0.11% and 0.19% respectively for this past Friday and gained 2.91% and 2.63% respectively for this past week. Our New York Stock Exchange Composite Index gained 0.24% this past Friday and gained 2.15% for this past week. Our VIX Volatility Index fell 4.38% this past Friday and fell 14.35% for this past week. Our gold ETF fell 0.14% this past Friday and gained 0.37% for this past week. Our oil ETF fell 1.11% this past Friday and gained 1.14% for this past week.

Team, let’s take a look at our economic calendar by going to our ‘Daily Insights’ tab, and our ‘Economic Calendar’ subtab. First, let’s take a look at Friday, May 11. Let’s take a look at our ‘Market Reflection’ summary. Then let’s look at Monday, May 14 and look at our ‘Market Focus’ pointers. Also let’s look at our once-a-week reports, the ‘International Perspective’ and the ‘Simply Economics’. These two reports are must-reads. They summarize the previous week and they introduce what’s coming up for the week to come.

Returning to May 11, ‘Import-Export’ prices. Import prices for March, month-over-month, were flat. This time around we revised that March number to be down 0.2%. The April number came in at 0.3%. Export prices month-over-month in March came in at 0.3% and in April, 0.6%. Year over year, our import prices in March, came in at 3.6%. We revised that number this time around to 3.3% and for April, we’re reporting 3.3%. Export prices year over year in March were 3.4% and they’ve gone up for April to 3.8%. Mid-month ‘Consumer Sentiment’, last time we reported was 98.8 and that’s where we stay, 98.8.

Taking a look at the news for the week to come, Monday looks to be a quiet day. Tuesday we have our ‘Retail Sales’. We also have our regions starting to report. And this is the week for housing information. We also see ‘Industrial Production’ being reported on Wednesday.

Let’s move on to our watch list by going to our ‘Trading Tools’ tab and our Watch Lists’ sub-tab. We had eight new tickers identified by our options trading candidate filter. They are highlighted in yellow. We’re going to evaluate them and their underlying symbols to see where we stand, looking for liquidity and patterns and we’ll add any appropriate ones to our watch list after that final screening.

Moving on to our ‘Trading Tools’ tab, and our ‘Daily Picks’ sub-tab, here you’ll find our Trading Trainer ‘Daily Picks Report Generation’ tool. We’re going to do a deeper dive on our indexes by looking at volume and trends. Volume was about the same as on Thursday, slightly lower, about the same as the 50-day, slightly lower, about the same as the 200-day, mixed. The oscillator shows that we have had heavier volume over the past days. Our short duration trends are bullish. Our long duration trends are neutral.

Backing this up, let’s take our template algorithm filters. These mathematically go through whatever raw data they are presented with, looking for patterns in the numbers. We’re going to present it with the raw data of our index tickers. That’s going to give us an idea what the broad market personality is doing, as well as what to look for in our watch lists. Our trend continuations are neutral. Our short-term trend and trend reversal are showing bullishness for about one trading week now. Our Bollinger Band Width Index is starting to get a little bit wider. Our bar counter has reset as we have popped out of the Bollinger Bands.

Let’s take a look at our ‘Trading Tools’ tab and our ‘Charting’ subtab. We’ll start with our ‘Quick Review’ template. This is a six month, daily chart with a linear scale and open high-low close bars and a separate pane for volume and volume average. To this ‘Quick Review’ template, I’m going to add the 30, 50 and 200-day simple moving averages. These lagging indicators help me determine the trend. I’ve applied these simple moving averages to the ‘Quick Review’ template here in a user-defined template in my personal profile. I’m going to apply this template to the indexes, specifically starting out with the Dow Jones Industrial Average.

We’ll start with a two year, weekly chart. As you can see, this was an up week. Volume was okay. We’re still in, what looks like, consolidation in the big picture. It seems like we have a lower high and a lower low, but then it looks like we have a higher low and let’s see here. This high, $24,868.65 compared to this one, $24,858.00. It actually looks like our polarity is full-on bull. Let’s move to a daily, six-month chart. So we’ve been looking at this consolidation and it looks like we’ve trended out of that. Perhaps now we’re looking at sideways channeling again. We’ll see how this current level of resistance holds. Our 30 is trending up. Our 50 is flat. Our 200 is trending up. We are testing bull with a higher high after a lower low. Our 7 has crossed back about the 30 and looks to soon cross above the 50. Our five minute shows a sideways choppy stall on Friday. Weekly is bullish. Our daily polarity is testing bull. We closed at $24,831.17. Our low, $24,717.50. We’re going to keep a note here that says, closed above resistance.

Let’s move on to the NASDAQ Exchange. We’ll start with our weekly, two-year chart. A real pop up in price for the NASDAQ. Our polarity with the higher low followed by the higher high is bullish. Switching to our six-month, daily chart, our 7-day has crossed back above the 30 and the 50. The 30 is trending up. The 50 is flat. The 200 is trending up. Price is trending up. Any consolidation we thought we saw, looks more like sideways channeling at this point. Our five-minute chart shows Friday was a sideways choppy day. We’re at $7402.88. Our low was $7372.00. It’s important that we reevaluate what is support and resistance. It almost looks as though our resistance level should be $7,600.00 and our support level should be… Actually, let’s use $7,500.00 and $6,850. $6,850 and $7,500.00.

Let’s move on to the S&P 500 Index, starting with our weekly, two-year chart. It looks like we have a bullish weekly bias as well. Six-month, daily chart. Again, we have to question our support and our resistance lines. Our 200 is up. Our 30 is up. Our 50 is flat. Our 7 is up above the 30 and the 50. Our five-minute chart shows a sideways stall on Friday like we saw across the other of the big three indexes. Back to our daily chart, closing at $2,727.72, Our low, $2,717.45. We’ll take a note. Closed above resistance. The current rebound has pushed us into bullish polarities for our weekly charts.

Taking a look at the New York Stock Exchange Composite Index, starting with a weekly, two-year chart, we can see a good popup in price today. Moving to our six-month, daily chart, definitely looking at sideways channeling. Our 7 is back above its 50 and above the 30. Our 200 is trending up. Our bias is clearly neutral.

Back to our VIX Volatility Index, looking at the weekly two-year chart, with 40-day simple moving average… Let me correct myself, 40-week simple moving average. The 40-week simple moving average is analogous to the 200-day simple moving average, seeing as how there are five trading days in every trading week. The implied volatility for the S&P 500 has dropped to low. Moving to a six-month, daily chart with 200-day simple moving average, we are now below the simple moving average for the first time in a while. Still at a healthy VIX, with the VIX closing at $12.65 down 4.38%.

The market is responding to the following including, but not limited to, transient external stochastic shocks, the US fiscal policy, the US Federal Reserve Monetary Policy, monetary policies of China, Europe and Japan, the price of oil, US economic news including employment, housing, manufacturing, and retail and market news including mergers acquisitions, initial public offerings, public companies going private and earnings.

That’s all I’ve got, team. Please take care.

Comment below to contact me with ANY option questions YOU have.

About The Author

A.J. Brown is widely recognized as “the world’s most disciplined option trader.” He has been actively trading equities and options since 1997, and has published daily insights for his Trading Trainer program participants every single night, 5-days a week, since 2002. He is the author of the wildly successful e-book called “The Seven Strategies of Successful Options Traders” and his home study courses and video series can be found in the libraries of the most successful investors and often times referred to by them as their secret weapons. Trading Trainer is based out of Fort Collins, Colorado.

An “Instant Dividend” 52 Times A Year!

Search

We are constantly striving to better serve your needs by improving our training materials and providing you the kind of support you deserve.You deserve nothing but the best from us and it's our responsibility to make sure we don't just meet those expectations but go way beyond.

So, if at any time you feel we should be doing more for you, please let us know. Our door is always open. See contact info below.